Rakuten’s Strategic Investment of $100 Million to Boost Operations in India
Japan’s leading internet conglomerate, Rakuten, is taking significant steps to bolster its global operations, particularly in India. This year, the company plans to invest at least $100 million and increase its headcount by 8%, as stated by a top executive in an interview with Reuters.
Commitment to Growth in India
Rakuten’s India CEO, Sunil Gopinath, revealed that the company aims to invest “at least three-digit millions of dollars” to scale up its technology, infrastructure, and hiring efforts, although he refrained from divulging the precise amount.
Diverse Operational Sectors
The conglomerate operates across multiple sectors including fintech, e-commerce, and telecommunications. Gopinath emphasized the important role of artificial intelligence (AI) in enhancing operations, particularly in business tools, customer experience, and employee productivity.
Expanding the Workforce
Currently, Rakuten employs around 4,000 people in India, with a notable 90% of these positions filled by tech staff. The company is particularly interested in recruiting “power users” of AI to support its ambitious growth plans.
“We look for AI-savvy individuals that we can integrate across the company,” Gopinath commented, highlighting the company’s commitment to fostering a tech-savvy workforce.
Innovative Technology Development
Rakuten’s India global capability center (GCC) plays a pivotal role in the development of Rakuten Pay, a leading payment application in Japan. The center also contributes to the SixthSense platform, designed to monitor system health and preemptively flag potential issues.
Describing the SixthSense platform, Gopinath remarked, “It is almost like Sherlock Holmes; it can identify issues that have already occurred and project potential future problems before they arise.” This platform caters to a diverse clientele, including banks, healthcare institutions, airlines, and the Indian government.
Profitable Outcomes via AI
In fiscal year 2024, Rakuten reported a profit of 10.5 billion yen ($73.62 million) largely attributed to its AI initiatives. The company’s goal for 2025 is to double this amount, showcasing its strong commitment to leveraging technology for growth.
Employees have reported a nearly 50% reduction in the time required to create sales materials, according to the company’s full-year earnings presentation.
Significant Operational Size
The India GCC is responsible for overseeing approximately 50% of Rakuten’s 70-plus global businesses, with operations spread over multiple locations, including two centers in Bengaluru.
Market Growth Projections
According to a report by Nasscom and consulting firm Zinnov, the market size of India’s global capability centers (GCCs) is projected to reach $105 billion by fiscal year 2030, up from $64.6 billion in 2024.
Conclusion
With these strategic investments and a focus on AI-driven enhancements, Rakuten is poised to strengthen its position in the Indian market while contributing to the overall growth of the technology sector in the region.
Questions and Answers
1. What amount is Rakuten planning to invest in India this year?
Rakuten intends to invest at least $100 million in India this year.
2. What percentage increase does Rakuten plan for its workforce in India?
The company plans to increase its headcount by 8% in India.
3. Which sectors does Rakuten operate in?
Rakuten operates in fintech, e-commerce, and telecommunications, among other sectors.
4. What technology does Rakuten use to enhance its operations?
Rakuten is utilizing artificial intelligence (AI) to boost its operations in various areas including business tools and customer experience.
5. What is the projected market size for India’s GCCs by fiscal year 2030?
The market size is expected to grow to $105 billion by fiscal year 2030, up from $64.6 billion in 2024.
